Sonic Automotive Inc. has named two new members to its board of directors, including the company president, as the nation’s fifth-largest dealership group increases its board size from eight directors to 10.
Sonic President Jeff Dyke and Marcus Smith, CEO of Speedway Motorsports Inc., were named to Sonic’s board last week. Their terms will expire in 2020.
Smith, a brother of Sonic CEO David Smith and a son of Sonic co-founder Bruton Smith, also has beneficial ownership in Sonic Automotive that exceeds 10 percent.
Sonic, in a regulatory filing, said with the new members, its board will now have five independent directors. Sonic said it qualifies as a “controlled company” for its stock listing on the New York Stock Exchange and doesn’t have to comply with a listing requirement to have a majority of independent directors.
Sonic said that while it had previously voluntarily complied with the requirement, “it will no longer do so unless and until the board otherwise determines in its discretion.”
In its 2019 proxy statement, Sonic indicated that it was “committed to having its board membership in favor of independent directors as evidenced by Sonic’s corporate governance guidelines, which provide that it is desirable that any non-employee director be qualified as an ‘independent director.’ ”
Dyke won’t receive any additional compensation for his board service, while Marcus Smith will receive the standard $70,000 annually for a nonemployee board director, plus use of a demonstration vehicle. Marcus Smith also will receive a $130,000 restricted stock grant of Class A stock, which will vest in a year.
Last week, Speedway Motorsports announced it will merge with Sonic Financial Corp., another company owned by the Smith family, moving the U.S. racetrack owner group private.
Sonic co-founder Scott Smith stepped down as CEO of Sonic Automotive and resigned from the board in fall 2018 when David Smith took over. Scott Smith stayed on for a time to consult but left the company in March.
Sonic, of Charlotte, N.C., ranks No. 5 on Automotive News’ list of the top 150 dealership groups based in the U.S., with retail sales of 122,717 new vehicles in 2018.